Latvia, Legal Counsel, Markets and Companies, Railways, Transport

The letter signed by Economic Police chief Peteris Bauska demands information from the Transport Ministry and asks the ministry to assess responsibility of officials and estimate possible loss if the implementation of the project is delayed.

The daily reported that the EUR 21.9 mln worth agreement two years ago was won by DMU Vilcieni, a partnership of three companies with specific reputation. Latvia’s Daugavpils Lokomotivju Remonta Rupnica (DLRR) is controlled by Estonian mlnaire Oleg Ossinovski. Rigas Vagonbuves Rupnica’s (RVR) council chairman is Russian citizen Eduard Boze, and it is indirectly controlled by Aleksandrs Brandavs, a board member of Honor To Serve Riga party, a ruling party in the Riga City Council. The third participant – VRC Zasulauks belongs to RVR (49 %) and Pasazieru Vilciens (50.9 %).

The project deadline has been extended several times. Also, deficiencies were discovered in the first groups of trains supplied to Pasazieru Vilciens.

Pasazieru Vilciens confirmed that the probe has been started. The company has received questions from the Economic Police and is preparing answers. At the same time, the company claimed that the project is in progress – four groups of trains have been put into operation, the fifth one is being accepted, and the sixth group of trains is being tested.

As reported, the Latvian government has granted another extension for the project until September 30.

The agreement on upgrading of 19 diesel trains was signed on January 31, 2014, and the original deadline was late September 2015 but then it was extended until June 30, 2016.

The Transport Ministry said that yet another deadline extension was necessary due to several factors, notably the fact that certain defects had been discovered after putting into operation the first group of the upgraded trains and parts from the trains in the fifth and sixth groups had been used to correct those defects but suppliers from Russia had been slow in making the delivery of spare parts and some parts still had not been received.

The total cost of the project is nearly EUR 22 mln, of which about EUR 9 mln is co-financing from the EU Cohesion Fund. Some of the EU financing was already lost when the previous deadline was missed.